Coin360 Weekly Dispatch | Crypto Market Updates & Highlights | August 31 - September 6, 2024

Crypto Weekly Market Update

Table of Contents

Market Movements and Trends

• Crypto Weekly Recap

Regulatory Updates

• CFTC fines Uniswap $175K over regulatory breach
• SEC fines Galois Capital $225K post-FTX collapse
• Ripple delays $125M SEC payment, launches stablecoin

Platform and Executive News

• Telegram updates moderation after CEO's arrest in France
• CZ barred from managing Binance but retains influence

DeFi Hacks and Security

• Penpie hacked, losing $27M due to DeFi vulnerability

Crypto Project Developments

• Polygon's MATIC upgrades to POL
• Trump-backed WLF stablecoin project faces scrutiny
• Cardano Voltaire era begins with governance overhaul
• Magic Eden criticized for US-exclusive domain and token launch

NFT Market Insights

• 96% of NFTs "dead" as market faces major downturn
• Rare CryptoPunk sold for $1.5M amid market slump

Crypto Weekly Recap

Bitcoin:

• Weekly change: -4.46%
• BTC fell ~10% from $59,900 to $54,160 in 3 days, marking a bearish week.
• BTC ETFs had a second straight week of outflows, losing $536.22M, surpassing last week’s outflows.
• BTC dropped below $57,700 on Monday as short-term holders sold 642,366 BTC worth $36.434 billion since mid-August, pushing wallets with 100+ BTC to a 17-month high.
• Bitcoin mining revenue in August 2024 hit a yearly low of $851 million, down $99.75 million from July.
• Crypto investment products lost $305 million, with BTC alone losing $319 million, while short Bitcoin products saw $4.4 million in inflows for the second week.
• BTC briefly recovered to $59,900 on Tuesday, then dropped to $54,250 by Wednesday as ETFs lost $287.78M, the largest outflow since May.
• On Wednesday, BTC plunged to $55,500 following a $1 trillion stock sell-off and weak U.S. economic data.
• After reclaiming $57,000, BTC dropped to $54,000 on Friday as U.S. job growth in August reached 142,000, and unemployment fell to 4.2%. 
• BTC ETFs continued to see outflows for a consecutive 7 days, with the Sept. 5 outflow hitting $211.15M.
• Bitcoin network activity hit a 3-year low as interest waned, and Google searches for "Bitcoin" fell to their lowest since August 2023.
• Arthur Hayes noted that a Fed rate cut might not boost BTC, as the reverse repo rate at 5.3% exceeded Treasury bills at 4.38%, attracting $120 billion after the Fed’s cut, signaling continued price pressure.
• Bitfinex analysts predicted a BTC drop below $50,000 due to a potential U.S. interest rate cut in September.
• As the U.S. election enters its next phase, candidates are revealing their crypto stances. The Trump family introduced a crypto project, Elon Musk was endorsed for a task force, and a Super PAC linked to Kamala Harris started accepting crypto donations. Both candidates now have 48% odds of winning on Polymarket.

Ethereum:

• Weekly change: -6%
• ETH mirrored BTC’s decline this week as its price tracked closely.
• The price dropped from a high of $2,563 on Monday to $2,276 by Friday.
• Ethereum faced skepticism as users shifted to other chains. Since the Dencun upgrade on March 13, revenue has plunged 99%. Some viewed this as Ethereum transitioning from a transaction platform to a security layer for Layer 2s, with short-term disruptions but long-term benefits.
• On Wednesday, Ethereum futures trading on CME reached a 9-month low in August, the weakest since November 2023, supporting claims of fading interest.
• Ether’s 5% market depth on U.S. exchanges dropped 20% after spot ETFs launched, signaling reduced liquidity and increased price sensitivity due to poor conditions and seasonality.
• Ethereum wallet adoption grew faster than Bitcoin's, but Ether underperformed Bitcoin by 44% since its shift to proof-of-stake. This was due to weaker network activity and rising Ether supply. Traders preferred Bitcoin, as shown by declining relative spot trading volume, with further declines likely.
• ETH ETFs saw three straight days of outflows, pushing cumulative inflows to -$562.31M, contrasting with BTC ETFs’ +$17.06B as of Sept. 5.

Altcoins:

• Metaplanet partnered with Japan’s SBI to improve Bitcoin custody and trading in the region. Link
• 21Shares introduced 21BTC to advance Bitcoin wrapping with better security and stability. Link
• Monochrome applied to launch an Ethereum ETF in Australia. Link
• Toncoin fell to $5 as South Korean police investigated Telegram. Link
• Frax Finance introduced Frax Name Service for decentralized identity management. Link
• OKX received full licensing in Singapore and appointed a former MAS official as CEO. Link
• Tokenization firm Libre, backed by Brevan Howard, launched on NEAR Blockchain. Link
• DeFi fees dropped 24% in August due to declining yield strategies. Link
• LayerZero launched its community program, allocating 5M ZRO tokens. Link
• BNB Chain added yBTC, and Core launched LstBTC amid rising Bitcoin staking. Link
• Zest Protocol introduced Bitcoin liquid staking with BTCz on Stacks. Link
• ZkSync’s active users dropped 80% as Matter Labs reduced its workforce by 16%. Link
• A Binance executive detained in Nigeria requested bail due to worsening health. Link
• Vega Protocol proposed shutting down its network and launching a new token. Link
• SK Telecom and Hana Financial acquired a stake in BitGo’s Korean branch. Link
• Justin Sun initiated a 100% on-chain buyback for SunPump. Link
• Aave and Sky partnered to enhance the DeFi ecosystem. Link
• Sonic Labs integrated Chainlink CCIP and Data Feeds to boost network capabilities. Link
• Toncoin dropped 94% due to a glitch, causing panic in the community. Link
• A Terraform wallet moved $62M in BTC while Do Kwon remained in legal limbo. Link
• Arbitrum Stylus mainnet launched, enabling Web3 development for traditional coders. Link
• Siemens and Samsung ramped up Web3 efforts with digital bonds and startup investments. Link
• Mysten Labs plans to release a Web3 gaming device in the first half of 2025. Link
• A major Solana whale quietly sold over $99 million worth of SOL this year. Link
• The SEC extended its deadline for deciding on 7RCC’s spot Bitcoin and carbon credit ETF. Link
• WazirX accelerated INR withdrawals after a hack but suspended crypto trading for six months. Link
• Euler v2 went live, introducing modular design and improved lending capabilities. Link
• AI tokens saw daily losses surpass the market average following DOJ’s Nvidia subpoena. Link
• Japan’s financial regulator considered taxing crypto as a financial asset. Link
• Conflux Network partnered with Alibaba Cloud. Link
• Bitfarms responded to Riot’s claims as their rivalry intensified. Link
• Robinhood settled a $3.9 million penalty for issues with crypto withdrawals. Link
• ApeCoin teased plans to boost Bored Ape development ahead of ApeChain launch. Link
• Binance planned to launch Solana staking in September. Link
• EigenLayer allocated 86 million tokens for stakeholders in season 2’s ‘stakedrop.’ Link
• Grass airdrop faced backlash over concerns about token distribution. Link
• Synthetix built its own blockchain on Optimism’s Superchain. Link
• Worldcoin aimed for global reach comparable to Facebook’s scale. Link
• ASI Alliance pushed for decentralized cloud infrastructure in AI development. Link
• Aave’s founder sold $6.67 million worth of AAVE tokens. Link
• Travala integrated with Skyscanner, offering access to 2.2M hotels. Link
• Vitalik Buterin initiated a suspicious 2.1 million STRK unlock. Link
• Mercuryo launched Spend, a virtual Mastercard for non-custodial crypto payments. Link
• Bybit introduced a liquid staking token to strengthen the Solana ecosystem. Link
• Cardano's IOHK and Hedera joined the Decentralized Recovery Alliance with Ripple and Algorand. Link
• Jupiter DEX added a market depth metric for high-risk meme tokens. Link
• Injective allowed traders to bet on BlackRock's BUIDL Fund growth. Link
• Kamala Harris-linked Super PAC started accepting crypto donations. Link
• Binance announced fixed-rate loans in USDC and FSUSD stablecoins. Link
• Kraken enabled WIF and PEPE trading in Canada. Link
• Liquity integrated NFTs in its V2 stablecoin upgrade. Link
• Celestia unveiled a roadmap to implement 1-gigabyte blocks. Link
• An MEV bot took out a $12M loan but only profited $20. Link
• The Dogecoin Foundation shared an important update on its Trailmap progress. Link
• FCA reported that 87% of crypto registration applications in the UK failed to meet standards. Link
• South Africa used AI to track down tax-evading crypto traders. Link
• Sonic SVM planned to sell $12.8M worth of HyperGrid nodes on Solana. Link

CFTC fines Uniswap $175K over regulatory breach

The Commodity Futures Trading Commission (CFTC) charged Uniswap Labs with facilitating unregistered retail commodity transactions and imposed a $175,000 settlement. Uniswap's decentralized platform enabled leveraged trading of digital assets, breaching CFTC regulations. Although Uniswap settled without admitting or denying the allegations, discord emerged within the CFTC. Commissioners voiced concerns that the enforcement action might hinder innovation in decentralized finance (DeFi), lacking clarity in regulatory guidance. Conversely, Uniswap claims that, despite ongoing regulatory challenges and increasing scrutiny from officials, they remain focused on advancing DeFi technology and affirm their commitment to abiding by regulations.

SEC fines Galois Capital $225K post-FTX collapse

The SEC charged Galois Capital for improper custody of client funds, losing half its assets after FTX’s collapse in November 2022, resulting in a $225,000 penalty. Additionally, the SEC raised concerns about FTX’s Chapter 11 repayment plan, particularly the potential use of stablecoins to reimburse creditors. While not explicitly illegal, the SEC reserves the right to challenge the legality of such transactions. The SEC’s stance has sparked criticism, especially over its inconsistent oversight of stablecoins. A crucial hearing on the matter is set for October 7, 2024.

Ripple delays $125M SEC payment, launches stablecoin

Reports stated that Ripple's legal team sought to delay a $125 million payment in its SEC case, offering to deposit $139 million in escrow while the appeal is resolved. Meanwhile, Ripple is launching a USD-pegged stablecoin, RLUSD, currently in private beta, expected to debut soon. CEO Brad Garlinghouse criticized the SEC’s hostility toward crypto during Korea Blockchain Week. Additionally, Ripple co-founder Chris Larsen endorsed Kamala Harris’s presidential campaign, joining 87 executives. Harris’s "Crypto for Harris" initiative seeks crypto industry support, countering Trump’s pro-crypto stance in the 2024 election campaign.

Telegram updates moderation after CEO's arrest in France

Telegram updated its private chat moderation policies following CEO Pavel Durov's arrest in France. Previously emphasizing chat confidentiality, the platform now allows users to report illegal content in private chats through a report button and email submission. Durov addressed his confusion over the arrest, denying personal accountability for third-party activities, and stressed Telegram's efforts in combating harmful content amid its 950 million user base. Despite challenges posed by rapid growth, Durov is dedicated to enhancing moderation. Following his statement, the TON price spiked by 8%, signaling investor confidence.  

CZ barred from managing Binance but retains influence

Changpeng Zhao (CZ) is permanently barred from managing Binance but will retain significant influence as the firm's largest shareholder with around 90% ownership. The ban prevents him from holding any operational roles but still provides voting rights on key decisions, director nominations, and the ability to replace the CEO. Despite this, CZ clarified that he doesn't intend to pursue executive roles in other companies and has plans to invest in emerging sectors like blockchain, AI, and biotechnology. Additionally, Binance's Kazakhstan subsidiary received regulatory approval, positioning it to become the country's first fully regulated Digital Asset Trading Facility operator.  

Penpie hacked, losing $27M due to DeFi vulnerability

Penpie, a DeFi protocol linked to Pendle, lost $27 million due to a vulnerability allowing fraudulent staking balance inflation. The attacker converted stolen assets to ETH using Li.Fi protocol, laundering $7 million through Tornado Cash. Penpie's native token plunged 40%, while Pendle's fell 8% but partly recovered. Pendle's swift action, pausing contracts, saved $105 million from potential loss. The surge in 2024 crypto hacks, totaling $313 million by August, underscores rising DeFi vulnerabilities. North Korean hackers are active, with recent notable incidents including significant Bitcoin and DAI thefts, emphasizing the crucial need for improved security measures.  

Polygon's MATIC upgrades to POL

Polygon's MATIC token underwent a significant technical upgrade, transitioning to the new Polygon Ecosystem Token (POL) on a 1:1 basis, marking it as the native gas and staking token starting from September 4. CEO Marc Boiron emphasized the introduction of 2% emissions to engage the community effectively. This upgrade, part of Polygon 2.0, aims to enhance community participation and features a "hyperproductive" POL token that can earn fees from diverse sources. The migration process was completed on September 4, automatically converting staked MATIC to POL. The successful testnet upgrade on July 17 preceded the full migration, aligning with the broader vision of Polygon 2.0 and the AggLayer.  

Trump-backed WLF stablecoin project faces scrutiny

World Liberty Financial (WLF), backed by Donald Trump, reportedly focuses on stablecoin adoption and user security, with 70% of its governance token, WLFI, held by insiders. The project faces scrutiny due to its ties to the hacked Dough Finance and centralized governance, before revealing that it will be built on Aave and Ethereum blockchain. Trump emphasizes crypto's role in U.S. leadership, criticizing current regulations and promoting domestic Bitcoin mining. Challenges include regulatory pressures, competition from established stablecoins, and security risks. Amid the mystery, Lara and Tiffany Trump’s social accounts were hacked, used to promote fraudulent tokens linked to WLF.

Cardano Voltaire era begins with governance overhaul

The recent Cardano Chang hard fork, signaling the beginning of the Voltaire era of decentralized governance, empowers ADA holders to drive key decisions. The upgrade introduces user-led governance bodies and limits existing entities' power. However, despite the milestone, ADA's price slumped. Charles Hoskinson opposes burning Cardano's 1.5 billion ADA treasury tokens worth $500 million, asserting the treasury assets are generated through block production and transactions, not preprinted tokens.